credit cards

Everyone enjoys spending money. Unfortunately not many are particularly good at following a budget to keep their finances in good order. The level of credit card debt in the USA suggests that there are plenty of people spending on a regular basis without actually paying off the bill in full. Once a balance is established it incurs a high level of interest. Interest is added at the end of each month so something that might be a bargain purchase bought on credit might ultimately end up being very costly indeed.

The recession resulted in an increase in consumer debt. The wise have paid off their debts as a matter of priority. Now it’s your turn. If you write down your regular income and expenditure it will put your financial position down in front of you. Your credit card debt and any debt on store cards will be costing you a significant amount of interest each month.

Credit Card Discipline

Before anything else you should make a decision to stop using your credit card; you are obviously living beyond your means. If at a later date when you have reduced the balance to zero you should only use your card again for convenience and if you can pay the full bill when requested. In an absolute emergency you can use the card but you must understand the consequences of doing that. Don’t even carry it with you perhaps?

The figures in front of you tell your story. The expensive debt should be cleared as a priority. There are online lenders who will look sympathetically at applicants who can prove they have a regular income and can afford the instalment payments each month until the borrowings are paid off completely. Certainly the interest applied to such realistic loans is at a much lower rate than that used by credit card companies.

The Cost of Debt

You need to understand your debt and what it is costing you. Some people psychologically address the smaller amounts first; instead of 6 creditors they are happy to reduce it to 5 and 4, in other words numerically rather than by interest rate. There is some validity in that approach if it increases satisfaction but also determination. If the consolidation loan described above can clear all debts other than mortgage which is in an altogether different category then all well and good.

There are occasions when you can negotiate rates. If a creditors feels you are liable to default he or she make accept some form of negotiation. If that is a means of reducing your core debt then that is certainly worth the approach.

Sacrifice

You may be thinking this has all the signs of major sacrifice. No one is claiming that there is np pain in clearing your debts but you must ask yourself a question. If you are earning a regular monthly income why is it that you are facing financial stress every day? The answer may be a combination of things ranging from misfortune to complacency and simple extravagance, living beyond your means. The reality is that unless you address the problem things will only get worse. Debt simply does not vanish and the day will come when you will be completely out of your depth with little or no escape route.

You show investigate whether you can spend less by getting more competitive insurance quotes and utility providers. It is easy just to continue with existing contracts but often there are cheaper options available. It seems a fairly common practice to produce special offers to attract new business without offering those deals to existing clients. If you are financial trouble you should not dismiss trying to get yourself better deals. The only cost is your time.

Perhaps you will need to make some economies in your day to day life; reducing your social budget may be a necessity? If your debts are growing there will be little choice. The days when you might recall how you enjoyed spending money can recede very quickly when the reality of your finances hit home. Discipline must replace any form of complacency. If you have a regular job, you can repair your financial situation but the longer you leave it the more difficult it will be.

Nobody knows the exact methods by which your credit score is calculated, but you should definitely understand the importance of having a good score, and some methods which will help you improve your credit score.

Here are 7 Ways To Improve Your Credit Score

Pay on time. Every time .

The biggest knock on a credit score is late or missed payments. While you can’t erase the sins of the past, you can make sure that moving forward you prove your credit worthiness by paying every bill on time.

Reduce the number of open debts.

It’s been thought that, all things equal, the number of debts you have can adversely affect your limit. For example, if you have $4,000 in credit card debt, you might have a lower score if you have this spread across eight cards versus consolidating the debt down to one or two cards.

Keep open available credit.

One thing that likely factors into your credit score is how much of your available credit you have in use. Again, using the $4,000 credit card balance, you might find yourself with a lower score if your overall limit is $5,000 versus if it’s $10,000. Not to say that you should open up new cards to increase your limit, but instead of closing cards and lowering your overall limit, you can just stop using them.

Understand different types of credit.

A $4,000 auto loan may have a different impact on your credit score than $4,000 in credit card debt. A mix of different types of debts is likely more favorable than just having one type of debt. Again, not advising that you run out and open more types of credit, but understanding the potential impact, especially before potentially taking on a new loan, is very important.

Keep aged credit.

Two people with identical credit situations can find themselves with vastly different credit scores simply depending on the age of their credit. If your oldest credit card was taken out just a year ago, you will likely have a lower score someone else whose oldest card was issued ten years ago, all other things equal. Before you start closing cards, again, take this into consideration.

Know that stability counts.

Many people open and close credit cards to take advantage of different reward programs. A few years ago, it was common to have reward cards available that would give you 5% or more back on your purchases, but the catch was that this was just a teaser, and the rewards would decline after a few months. People would simply move on once the premium rewards disappeared in order to continue to maximize their overall rewards. This can add up to big bucks in rewards but this will have a negative impact on your score. If you already have a top score, this will likely be negligible. For someone with an average score, this could actually do more harm than good. Weigh not just the reward benefits, but also the long term potential costs.

Keep working hard.

If you have a 600 credit score, it’s not going to jump up to 800 overnight. But, it can be done as long as you work hard and understand that time is on your side. While there are many offers out there that claim to improve your credit score overnight, the best and most stable method is to make solid choices as noted above and do so over time. That will outlast any gimmick!

Readers, what have you done that’s improved your credit score? Have you found any methods to work against you? I’d love to hear your thoughts in the comments below.

American Express, also known as Amex, is one of the oldest credit card companies in the country. Unlike other creditors, which gave you the option to make monthly payments to pay down your credit, the traditional American Express card extends a shorter line of credit. You needed to pay off your balance each month to remain in good standing. The company has also added new cards that functioned more like traditional credit cards, giving you more time to pay off your balance. Before applying for a new card, you should search around the web for rewards cards. After all, it’s better to get something rather than nothing for purchases you plan on making regardless.

Enhanced Business Gold Rewards Card

The Enhanced Business Gold Rewards Card is an American Express card designed for business travelers and business owners. When you open an account, you gain access to several benefits. If you use the card to open an Amazon Prime account and spend a select amount of money, the company will refund you the cost of your Prime membership. You’ll also receive 30,000 bonus points when you spend a minimum of $5,000 within the first three months of opening your account. The 1:1 transfer program with this card lets you exchange points that you use for an equal amount of points on your Delta or other loyalty program account. American Express will also give you six bonus points for each $1 that you spend during your first few months of membership.

Blue Sky Preferred Card from American Express

American Express created its Blue Sky cards for those who wanted a more traditional credit card. The Preferred Card comes with a $75 annual fee, but the company won’t charge interest on any balance transfers or purchases that you make during the first 15 months after you open an account. If you spend $1,000 or more in the first three months that you have an account, you’ll earn 15,000 bonus points. You can trade in your points to earn discounts on your travels. American Express will actually credit your statement with a set amount of money based on the number of points you redeem. You’ll earn one point for every $1 that you spend at participating locations and two bonus points for every $1 at certain rental car companies, hotels and restaurants.

Gold Delta SkyMiles Credit Card

Charge at least $1,000 to your Gold Delta SkyMiles Credit Card through American Express within three months, and the company will reward you with 30,000 air miles. Amex also gives you the chance to earn additional bonus points before opening an account just by comparing different cards or by being a current member of the Delta SkyMiles program. This loyalty program gives you points when you fly through Delta, which you can redeem for other flights. Delta will give you a free economy flight to dozens of destinations across the country for just 25,000 points.

Platinum Delta SkyMiles Credit Card

Similar to the Gold Card, the Platinum Delta SkyMiles Credit Card comes with free points when you make purchases with your card. If you book a flight with Delta within three months, American Express will give you a free credit on your statement, and you can earn 5,000 bonus miles on your SkyMiles account when you purchase $1,000 or more with your card during those initial three months. Amex credit card offers through the mail let you earn additional rewards. When you spend a certain amount of money or book a certain amount of miles, you become a Silver Medallion member. Amex will also give you more than 30 miles per $1 that you spend when you meet certain eligibility guidelines.

American Express Works For Us

We have had an American Express card for about two years, and it has become one of our favorite. Our cards focus on cash back rewards, and our American Express has proven to be the most beneficial for us. Remember, use your cards wisely and find what’s best for you. These days, there is surely an Amex card to fit your needs.

Even though all of the Christmas presents have been unwrapped and put away, for many people, the financial implications of spending around the holidays spill over into January. And as we all know the effects can spill over way past January, where holiday spending can be a burden throughout the entire year.

Many people find that their holiday spending is a never ending cycle. By the time you catch up from last holiday (if you do), the next season is here already.

I’m here to tell you that there is hope, but if you want to get your financial house in order, it’s time to start now. This month. Not next month. Get started in January.

Here are a few things that you can do to get out from the burden you might feel from your holiday spending, and more importantly, set the table so that you don’t find yourself burdened next year.

Determine your exact financial position – Surprisingly, many people who have bills due from holiday spending can’t tell you exactly what those bills total up to be. If you don’t know what you owe, you’ll never be able to set a path for how to pay off those bills. Look at all of your credit card statements and put together a total on what you owe.

Figure out how long it would take to pay off those bills without any changes – If all of your income, your expenses, and bills stayed the same, figure out how long it would take to pay off your credit cards at the current rate. If it’s a month or two, then work to stay in those lines. For many, however, it is a much longer prospect. This is where you really need to make some changes.

Review your expenses – Take a look at your expenses. Look at every bill and ask yourself if you can eliminate it or trim it. Can you cut some cable channels? Can you turn the thermostat down a degree or two? Can you cancel a subscription service, whether it be a magazine or Netflix or something else? Apply the money you save directly to the money you owe.

Lower your interest rates – Do you know what your interest rates are on every loan you’re paying? Whether it be your mortgage, your car loan, or credit cards, if you’re paying interest, you should know what the interest rates are. You should also know what comparable rates are for your type of loan. If you’re paying way too much, then it’s time to start looking at lowering them. The easiest one is credit cards. If you are paying a high rate, call and ask them to have it lowered. Many credit card companies will lower them so that you don’t leave.

Even better, eliminate interest altogether – One thing that’s better than a lower interest rate is no interest rate. Look out there for balance transfer offer, and try to look for ones that will give you a 0% rate. You won’t get to keep the 0% rate forever, but if you find one that gives you 3-6 months, you can apply all of your payments (combined with the extra payments from the cost saving measures you took above) to pay a huge chunk (or maybe all) of the amount you owe during that time. You should find balance transfer offers and compare them to see which one fits best for you.

Start planning for next year – Your primary goal should be to get out of any lingering effects from this past holiday season, and your planning now will help you do that. However, nearly just as important is making sure that your plan lets you avoid getting in the same situation next year. Make a budget for the holidays, and see where you can make some reductions? If you get your credit card balance knocked out in July, can you take the money you were paying and set it aside for next holiday season? If you spend with cash, can you set aside your loose change as a way to save some money throughout the year? These are just a few things that you can do to make sure that your plan addresses not just the short term, but also sets you up for long term success.

If the holidays aren’t over from a financial perspective, know that you’re not alone, and more importantly, know that your situation can be managed. Knowledge, hard work, and long term planning will help you clean up from the holidays, and set you up for long term success in the years to come.